Shares fall in firm that doctored TV footage of the Queen

Thursday 1 November 2007 11.05 EDT
First published on Thursday 1 November 2007 11.05 EDT

RDF, the independent television producer behind doctored footage of the Queen, was seeking to reassure investors yesterday after admitting "crowngate" would hurt it more than first feared. Shares in the maker of Faking It and Wife Swap sank after it conceded the true extent of the financial damage from a scandal that started with RDF sending the BBC a tape misleadingly edited to show the Queen storming out of a photoshoot "in a huff".

David Frank, chief executive, told the market that the commissioning suspensions subsequently imposed on RDF by the BBC and ITV lasted "longer than we originally anticipated".

"As a result, the group will not make up sufficient ground to fulfil expectations for this year within its UK production division," he added.

The BBC and ITV suspensions, which coincide with a key commissioning season, came after the Queen footage was shown at a BBC press launch. RDF had originally predicted that neither suspension would have a "material impact on the group's results in the current year".

Mr Frank stressed yesterday that strong demand from US customers would go "some way to redress" the UK blow. He also said RDF was "confident" an agreement with ITV to lift the suspension "will be reached imminently".

"We are engaged in a dialogue with the BBC that we expect will lead to the lifting of the suspension," he added.

Although there have been reports it could happen by the end of the year, executives at RDF would not make any predictions. "We are hopeful that it will be lifted as soon as possible but we just have to watch and wait," said finance director Janice Price. "The other thing that we are hopeful will happen is that it will be a phased recovery coming back through from the BBC, so the divisions that are further removed from RDF will come back faster."

Discussing RDF's first-half results, Ms Price flagged up business from abroad and said "crowngate" had not soured relations with key US customers. In fact, they had not understood all the British "furore", she added.

A wave of investments, partly in its US operations, knocked back RDF's pre-tax profits in the six months to July 31. They fell 27% to £1.9m on revenues up 38% to £51.6m.

The shares lost 6.5p, or 3.3%, to 189p. They have shed 26% since the "crowngate" affair broke.